Media shares plunged Wednesday as stocks closed in official bear market territory in the face of a bona fide global coronavirus pandemic.
Investors punished stocks from Dish to Live Nation, Gray Television, Cinemark, National Cinemedia and AMC Entertainment with double-digit losses. Shares of the latter two companies settled at, respectively, just under 5 bucks and just over 3.
Apple, which closed all its retail stories in Italy today, was down by 3.5%. Italy announced later in the day that all non-essential retail activities will be shuttered — meaning pretty much only drugstores, supermarkets and banks will stay open. Restaurants can only deliver.
ViacomCBS, whose falling share price has been giving parent company National Amusements some angst, shed 3.5%. Ratings agency S&P Global put NAI on negative credit watch yesterday because it uses ViacomCBS stock as loan collateral.
Comcast fell 3% and Netflix was down 3.9%.
The nightmarish march of cancellations across the industry continued from NAB to live NewFront presentations by Twitter and YouTube to production of the latest season of Survivor. The NCAA will play games without fans and late-night television will tape shows without studio audiences.
Twitter was down a hefty 8.8%. Google parent Alphabet was down 5%. Facebook fell 4.5% and Amazon was down 3.7%.
This is the first bear market — defined by a 20% drop from the high — in 11 years. Sixth graders have never seen one. The Dow fell 1,464 points or 5.86%.
The World Health Organization can take at least partial credit. Around midday it officially designated the coronavirus outbreak a pandemic, present in over 100 countries with 100,000 infected.
Investors were also disappointed by scant details from the White House on a stimulus package President Donald Trump earlier this week had characterized as “very major.” The measures reportedly in consideration included a payroll tax cut and expanded protections for workers.
The Bank of England followed the Fed with a major interest-rate cut saying, “Indicators of financial market uncertainty have reached extreme levels.”
UBS downgraded its forecast for U.S. gross domestic product and said it now expects U.S. economic activity will turn negative in the second quarter.
“Pandemic is not a word to use lightly or carelessly,” said WHO Director-General Tedros Adhanom Ghebreyesus. “It is a word that, if misused, can cause unreasonable fear, or unjustified acceptance that the fight is over, leading to unnecessary suffering and death.” But he stressed that 81 countries “have not reported any COVID-19 cases and and 57 countries have reported 10 cases or less. We cannot say this loudly enough, or clearly enough, or often enough: all countries can still change the course of this pandemic.”
The WHO last declared a pandemic in 2009 to describe the H1N1 influenza outbreak.